Elon Musk has merged SpaceX and xAI in a deal that values the combined entity at $1.25 trillion — the largest corporate merger ever recorded. SpaceX was valued at $1 trillion and xAI at $250 billion at the time of the transaction, which Musk announced via a memo posted to SpaceX's website.
The driving vision behind the merger is orbital AI infrastructure. Musk has filed with the Federal Communications Commission to launch a constellation of up to 1 million satellites into orbit, intended to serve as solar-powered data centers providing AI compute from space. He argued in the memo that "the lowest cost way to generate AI compute will be in space" within the next two to three years — a bold claim that has drawn both fascination and skepticism from the engineering community.
The deal comes with significant turbulence inside xAI. Six of the startup's 12 co-founders have now departed, including Tony Wu and Jimmy Ba, who left in quick succession in the weeks surrounding the merger announcement. Despite the exits, xAI's Grok AI — deeply integrated into X — continues to expand its user base and capabilities.